Travel buyers want content but who will pay?

by Business Travel iQ | 08 August 2019

Travel programmes are expanding to include NDC and other direct content. TMCs are going to be increasingly squeezed

Travel buyers love content and want more of it.

It is the key finding of a new report into what travel buyers are looking for produced by SAP Concur and the GBTA, which is holding its annual convention this week in Chicago.

The Evolution of Corporate Content, which analysed the responses of 226 travel buyers, found that a considerable proportion of respondents were planning to add content through NDC, supplier direct and direct connects over the next 12 months.

Our chart this week shows the number of buyers who already have access to such bookings and their plans for the year ahead.

content

Source: SAP Concur/GBTA

But how will they access this content?

The survey also reveals that most buyers feel that the online booking tool (OBT) will remain the channel of choice in corporate programmes.

Almost three-quarters of buyers (72%) expect bookings made through their OBT will increase in the next three years, with only 4% believing OBT use will decrease during that time. In contrast, 40% expect bookings made directly through airline websites to decrease while 38% believe those through hotel websites will decrease.

This raises the question of how TMC fees will change in the near term.

Suppliers are increasingly adding incentives for content booked through direct channels – or rather disincentives for bookings made through indirect channels, such as a TMC booking made through the GDS.

The SAP Concur/GBTA survey says that half of buyers who responded plan to try to negotiate away such fees, while 30% will seek to implement alternative sources without fees. Some 12% say they would pay the additional fees.

The question is whether negotiation will actually work.

TMCs need a viable business model to survive and have become hopelessly addicted to fees – although it is not necessarily their fault. Many TMCs have decided the battle is not worth it and have chosen to consolidate instead in order to achieve economies of scale.

TMCs may increasingly find themselves squeezed between the irresistible force of suppliers and the immovable object of their travel buyer customers.

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